For the past couple of weeks, I've been floating around this hypothesis about the stock market and commodity collapse.
Is it possible that the recent down turns are the result of the Olympics being over?
Think about it.
In the run up to the Olympics, the Chinese were eating up commodities like ants on a dinner mint. In an attempt to showcase their country, they were on a 6-8 year 24/7 construction and business binge. As soon as the games were over, their appetite for commodities like crude oil and metals dropped tremendously.
If you look at the attached price schedule, crude reached its highest price point on 7/4/08 and it's dropped steadily since then.
It seems tremendously unlikely that something like the Games could have such a dramatic impact on a global economy, but we're also talking about a multiplier of 1.2 billion people. Even a slight slowdown in Chinese consumption would have a ripple effect throughout an entire global economy.
It's nothing but an anecdotal hypothesis, but I think it fits.
What do you think?
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